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USD: Dollar Tracking For Its Best Week Since April, Amid Multiple Supports

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At this stage, the USD BBDXY index is up over a little over 1% for this week. This would be the USD's first weekly gain since the end of August and best week since mid April. 

  • A combination of factors have aided the USD over this period. The general tone to data outcomes has been more positive, on balance. The chart below plots the Citi US activity surprise index against the USD BBDXY. The surprise index is at multi month highs back to early May.
  • This, along with Powell's recent rhetoric on not being in a hurry to ease quickly, has clearly helped the USD/yield backdrop. We have another important litmus test tonight with US NFP, but all else equal, any positive surprises should benefit the USD.
  • Other factors have helped the USD in terms of central bank outlooks this past week, with BoE, BoJ and RBNZ leaning more dovish. 

Fig 1: Citi US EASI Versus USD BBDXY Index 

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At this stage, the USD BBDXY index is up over a little over 1% for this week. This would be the USD's first weekly gain since the end of August and best week since mid April. 

  • A combination of factors have aided the USD over this period. The general tone to data outcomes has been more positive, on balance. The chart below plots the Citi US activity surprise index against the USD BBDXY. The surprise index is at multi month highs back to early May.
  • This, along with Powell's recent rhetoric on not being in a hurry to ease quickly, has clearly helped the USD/yield backdrop. We have another important litmus test tonight with US NFP, but all else equal, any positive surprises should benefit the USD.
  • Other factors have helped the USD in terms of central bank outlooks this past week, with BoE, BoJ and RBNZ leaning more dovish. 

Fig 1: Citi US EASI Versus USD BBDXY Index 

Keep reading...Show less